foreign workers and naturalized U.S. citizens) constituted about 17 percent of the Category 1 IT workforce in 1998, compared to about 10 percent of the total U.S. population. The committee estimates that temporary nonimmigrant workers (mostly with H-1B visas) constitute about 10 percent of the Category 1 IT workforce, although this figure likely represents an upper bound.

Because the United States does not have a monopoly on productive, knowledgeable, and motivated individuals, U.S. employers seek talent from around the world. The critical feature of the H-1B program is that it enables employers to hire qualified foreign workers in a matter of months, in contrast to the years required to attract and train additional U.S. students or to obtain green cards for prospective permanent residents.

The committee believes that foreign Category 1 and Category 2 IT workers—including the H-1B visa holders—can make positive contributions in a number of ways to the U.S. IT sector, IT-intensive firms, and the economy as a whole. For example, while H-1B visa holders are far from the dominant influence on the IT workforce, their number is large enough that without these workers there would likely be a slowdown in the rate of growth in the IT sector. At the same time, economic theory implies that an increase in the supply of IT workers, including temporary nonimmigrant workers, will cause the corresponding IT wage rates to be lower than they otherwise would have been. Theory alone does not imply any particular numerical magnitude of this effect. It is the committee's judgment that the current size of the H-1B workforce relative to the overall Category 1 IT workforce is large enough to exert a nonnegligible moderating force that keeps wages from rising as fast as might be expected in a tight labor market.

Finally, in light of the controversy over the level of the H-1B cap, the committee has found no analytical basis for determining the optimal level of such visas, and decisions to reduce or increase the cap on H-1B visas are fundamentally political. However, an increased number of H-1B visas is likely to result in future additional pressure on the permanent immigration program unless Congress also adjusts the various numerical limits on permanent residents.